The US-based financial conglomerate priced a HK$1.1 billion ($141 million) five-year at Hibor plus 15bp. At this size, the issue is largest five-year ever from a non-Asian financial insitution to date in the Hong Kong bond market.
"Building on significant investor sponsorship, with this five-year offering we have established a new borrowing franchise for Citigroup. This is the eighth currency that Citigroup has funded in this year and is part of the efforts to diversify the borrowing programme into new investor markets. We expect to continue to expand our funding platform in Hong Kong dollars in response to investor interest and are pleased to contribute to the further development of the Hong Kong capital markets," says Charles Wainhouse, global head of capital markets, Citigroup.
The issue was sold mainly to local investors in Hong Kong who were keen to pick up the paper that adds a bit of variety to the usual European and Australian bank names that dominate the local bond scene.
Proceeds will be used for general corporate purposes with the issue launched off the bank's EMTN programme. Proceeds are expected to be swapped to US dollars with the after-swap funding in line and consistent with Citigroup's international funding levels.
Citigroup is rated Aa1/AA-/AA+ (Moody's/S&P/Fitch).
"We are pleased to be able to launch the largest five-year Hong Kong dollar issue by a non-Asian financial institution. This deal demonstrates Citigroup's commitment to be a key player in the local debt capital markets scene in Hong Kong," says T C Chan, Citigroup's CCO for Hong Kong.
Citigroup Global Markets was bookrunner on the offering. Historically, Citi has not been a strong bookrunner in the Hong Kong domestic market - which has long been dominated by HSBC - and its recent role may signal a change of strategy.